Why bitcoin buy and sell price is different

If a large government lets slip that it is uncertain about how to regulate bitcoin, as happened with China, then that can cause the price to fall. It follows the ideas set out in a whitepaper by the mysterious Satoshi Nakamoto, whose true identity has yet to be verified. If people are trading lots of a particular asset all the time, then it becomes harder for one person or event to shift that price in any single direction. Tim Santeford Tim Santeford 1 1 silver badge 6 6 bronze badges.

How Much was 1 Bitcoin Worth in 2009?

Days Since All Time High. Bitcoin was not traded on any exchanges in Its first recorded price was in Bitcoin therefore appears superficially similar to any symbol traded on foreign exchange markets. Unlike fiat currencies however, there is no official Bitcoin price; only various averages based on price feeds from global exchanges. Iis Average and CoinDesk are two such indices reporting the average price.

Bitcoin Is a Volatile Asset; How Is Its Price Set?

While much of the news surrounding bitcoin in the past year has been about the tremendous gains, there has been less discussion about the calculation of the value itself , and particularly about how Google or any other source, for that matter has determined the value of a bitcoin. Do a search on several different cryptocurrency exchanges around the world at the exact same time, and you’re likely to find somewhat different values for a single bitcoin. Why is it that the price of bitcoin varies depending upon where one looks? The primary explanation for discrepancies in bitcoin price across different exchanges is the fact that, as a decentralized digital currency, there is no standard or global bitcoin price at any given period of time. It isn’t pegged to the USD or to any other fiat currency, nor is it linked to a particular country or to an exchange. As with commodities of all types, supply and demand vary depending upon the time and the market, and the price of bitcoin fluctuates as a result. Given that there is no global standard for the price of a single bitcoin, how can investors be sure that Google, a digital currency exchange, or another price tracker is accurate?

For instance, as of a. ET on Tuesday, Bitcoin was trading on these exchanges at the following price points:. First, liquidity. Bitcoin trading volume can be massive on the larger exchanges, such as the ones above, but much lower on smaller exchanges. Those differences in supply affect the price.

Second, there’s no established common way to pgice bitcoin, which means nobody knows what it’s «supposed» to cost, and the price is based purely on trading. Third, moving money across exchanges can be messy and inefficient, and requires lots of collateral to do efficiently. That means it’s hard for traders to bifcoin differences across exchanges, which allows these price differences to persist for longer than they would in a more efficient market.

Finally, Pisani says there’s an «infrastructure issue» wherein buyers can’t currently quickly buy bitcoin across multiple exchanges at once, again, making it hard to arbitrage these price differences.

Pisani says this will be something that needs ssll be looked into during the next year as bitcoin increases in popularity. Sign up for free newsletters and get more CNBC delivered to your inbox. Get this delivered to your inbox, and more info about our products and services. All Rights Reserved. Data also provided by. Skip Navigation. Markets Pre-Markets U.

Key Points. Bitcoin prices vary depending on the exchange you’re buying it on. This has to do with several things, why bitcoin buy and sell price is different volume on an exchange. Pisani also says we need improved infrastructure to help align bitcoin prices on different exchanges. VIDEO TV Optimized. Bitcoin prices vary depending on the exchange they’re trading on. Related Tags. Trending Now. News Tips Got a confidential news tip? We want to hear from you. Get In Touch.

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Popular Courses. Bitcoin is a volatile animal that many iis confusing when considering how its price is actually set. Bitcoin is never traded in one place. With bitcoin, the volumes are relatively small, meaning that single events can make a bigger difference. The price of bitcoin is very volatile. Home Questions Tags Users Unanswered. When the currency was first launched, it had no official price because no one was selling it for US dollars. Blockchain Explained A guide to help you understand what blockchain is and how it can be used by industries. The spread goes to the broker to pay for some of the cost of the trade.